Bio Lubricants Market Size, Share & COVID-19 Impact Analysis, By Application (Hydraulic Fluids, Metalworking Fluids, Chainsaw Oils, Mold Release Agents, Two-Cycle Engine Oils, Gear Oils, Greases, and Others), By End-use Industry (Automotive and Other Transportation, Metalworking, Mining, Forestry, Marine, Engines, and Others), and Regional Forecast, 2022-2029

The global bio lubricants market size was valued at USD 2.92 billion in 2021. The market is projected to grow from USD 3.08 billion in 2022 to USD 4.26 billion by 2029, exhibiting a CAGR of 4.7% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 14.6% in 2020 as compared to 2019.

The widely accepted fact about bio lubricants is that sustainable and biodegradable base stocks are used to formulate them. The global demand for bio-based lubricants is projected to witness substantial growth during the forecast period due to the growing usage of these chemicals in the transportation & manufacturing industries. The increasing demand for bio-based lubricants is mainly due to the rising awareness and understanding of the environment, the introduction of strict legislation, and the acceptance by industries of bio-based lubricants. In addition, the introduction of legislation and the rise in government spending on research and development and product innovation are projected to create lucrative opportunities for the bio lubricants market growth.

COVID-19 IMPACT

Production Shutdown of Automotive Plants amid COVID-19 Pandemic to Stall Market Growth

The adverse repercussions of COVID-19, beyond the negative effect on volume demand, may result in the postponement or even the extension of regulations regarding conventional lubricants. Meanwhile, the automobile industry in Europe has called on the European Commission to loosen its carbon dioxide reduction goals. In addition, the amount of investment inflows will most likely be decreased or halted for most of 2020 due to COVID-19. As laboratories and technological centers have been closed due to lockdowns, new research projects for clients had to be put on hold. Bio lubricants are likely to play a significant role in facilitating the transition of countries toward a carbon-neutral economy due to their healthy existence and environmental credentials, as well as their increased protection for workers, better efficiency, and lower energy usage. For direct oil cooling in electric vehicles, bio-based fluids might find applications in thermal management. Significant business demand for bio-based products will be created by the eventual introduction of immersion cooling systems by European OEMs.

In view of the downturn in transportation, manufacturing production, and lubricant production, stakeholders around the supply chain of bio-based lubricants have seen substantial effects due to the pandemic. Maintenance intervals, car use, and vehicle purchases plummeted when more individuals started operating remotely in the transportation business. Meanwhile, due to plant shutdowns, the demand for bio-based lubricants also dropped. On COVID-19 emergency, European carmakers had shut down factories. To deal with the coronavirus outbreak and diving demand, PSA, Renault, and Fiat Chrysler cut production at European plants. Renault halted manufacturing through 12 production sites affecting about 18,000 workers in France.

LATEST TRENDS

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Biodegradable Lubricants to Replace Mineral Oil-Based Lubricants

The increased use of bio lubricants as an acceptable substitute for petroleum based oils has solved environmental issues. Plant oils and animal fat are gradually being used as renewable raw materials. In the field of lubricants, environmental and economic considerations contribute, after necessary chemical changes, to the use of plant oils and animal fats or used oils and fats. Vegetable oil-based lubricants, including biodegradability, cost-effectiveness, renewability, and lower environmental impacts, give major advantages over petroleum-based lubricants. In the market, mineral oil-based lubricants are commonly used. Lubricant use is immense, and as a result of leakages, injuries, instability, and overall failure applications, 50% of the quantity is released back into the atmosphere. Fresh lubricant is altered several times before being discarded into the environment. Such losses have severely impacted the atmosphere by allowing air, freshwater, and soil to become polluted. With rising public awareness about the environmental effects of mineral oil-based lubricants, the need for biodegradable bio-based lubricants has increased.

DRIVING FACTORS

Stringent Government Regulations Governing Oil-based Lubricants to Boost Market

The United States and Europe are the most advanced regions on the regulatory front, having introduced obligatory and optional programs encouraging the use of bio-based materials over the entire service life of goods and services due to their lower environmental impact. The Vessel General Permit (VGP) is the most impactful legislation in North America. Europe has the EU eco-label, a forum primarily focused on established eco-labels from various European countries, including Germany (Blue Angel), the Netherlands (VAMIL Regulation), and Sweden (Swedish Standard). End-use businesses are eager to introduce lubricants of high quality and outstanding output embodied in lubricants and machines' energy efficiency and extended lifespan. While environmental responsibility and public opinion are important, a secondary focus is given to these facets. If the EU Ecolabel is set to hit a wider range of end-users, more concrete initiatives, such as balancing price, efficiency, and sustainability, are required. A popular assumption is that stricter standards, such as limiting the use of compounds (including lubricant additives such as intense heat, corrosion inhibitors, and biocides) containing the harmful properties required to satisfy efficiency specifications, concern the authorities.

Regulators are imposing tougher requirements for renewability as well. There are signs that the renewable content of 25% to -50% will rise to 60% or even 80%. Although benefiting the bio-synthetic base stock and the oleo chemical synthetic esters, this would exclude the petrochemical synthetic base stock from the bio-based lubricants industry. A systematic approach is being taken today as the lifecycle of a bio lubricant is being analyzed, including the environmental effects of bio-based lubricants through processing, use, and disposal. Special focus is placed on motor oil for cars. The growing interest in environmental issues would benefit bio-based lubricants, but also from the background of current regulations. Consequently, the current favorable climate for bio-based lubricants makes market players very positive about the sustainability of an evergreen industry.

RESTRAINING FACTORS

High Cost of Bio-Based Lubricants and Low Lubricating Properties to Hamper Market

Vegetable oil-based lubricants are organic and largely biodegradable and can thus be used as a potential alternative for conventional lubricants. However, their direct use as base oil is constrained by their low oxidative properties, thermal and hydrolytic stability, poor low-temperature properties, and a narrow range of accessible viscosities. These drawbacks can be mitigated through proper chemical alterations, formulations with antioxidants, and combinations with mineral oils. However, they contribute to increased costs, contamination, and biodegradability decline. Therefore, it is a great challenge to produce a cost-effective bio-based lubricant with a groundbreaking combination of biodegradability and high lubricant properties.

The cost of these bio lubricants is a significant hurdle. In contrast to a conventional lubricant, a bio-based lubricant costs anywhere between 30-40% higher. Most bio-based products are priced to compete with mineral oil products that are mid-to high-performance. However, for use in many applications where biodegradability, lubricity, viscosity, and fire protection are particularly significant, higher-priced goods can also be justified.

SEGMENTATION

By Application Analysis

Hydraulic Fluids Segment to Hold a Substantial Share of the Global Market

Based on application, the market is segmented into hydraulic fluids, metalworking fluids, chainsaw oils, mold release agents, two-cycle engine oils, gear oils, greases, and others.

The hydraulic fluids segment held the major market share in 2021. To improve operations such as harvesters, cranes, tractors, or load carriers in forests, bio-based lubricants are often used as hydraulic fluids. Many manufacturers of bio-based lubricants are mindful of this market opportunity and currently have and/or are designing products that represent areas most vulnerable to spills and applications that are lost in usage.

Another lost-in-use application that requires additional lubrication of chainsaw bars and chains is a bar and chain oil. This is a tiny but potentially lucrative market, provided that most chainsaws are used outdoors, and most are used in environmentally vulnerable areas such as forests and agriculture. In the lubrication of chainsaws, bio-based lubricants are used. Oil is exposed to a centrifugal force during the operation of the instrument and extended across the forest floor.

By End-use Industry Analysis

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Automotive and Other Transportation Segment to Expand Rapidly Due to Low Toxicity and Strong Lubricating Properties

In terms of end-use industry, the market is segmented into automotive and other transportation, metalworking, mining, forestry, marine, engines, and others.

In terms of volume, the automotive and other transportation segment accounted for the primary market share. In the automobile and machinery industries, considerable interest is concentrated on maximizing the environmental friendliness, longevity, performance, and energy efficiency of lubricant materials. Due to their low toxicity, strong lubricating properties, high viscosity index, high combustion temperature, the extended service life of machines, and others, bio-based lubricants are potential replacement lubricants in the automotive industry.

Many industries are using bio-based metal cutting oils and coolants for gear cutting, grinding, and general machining. Bio-based metalworking fluids have several advantages over petroleum-based materials, aside from the environmental benefits such as superior viscosity/pressure performance, lower volatility, higher flash point, less smoke and risk of fire, and others. Bio-greases are especially suitable for the lubrication of forestry equipment, construction vehicles, rail curves, rail flanges, and marine applications. There is a simple loss-lubrication condition in all the above cases, where the lubricating grease inevitably ends up in either soil or water. The market currently consists of many high-performance bio-greases, but the amount generated remains scanty.

REGIONAL INSIGHTS

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The market size in North America stood at USD 1.29 billion in 2021. North America dominated the bio lubricants market share in 2021 and is likely to maintain its position during the forecast period. A revitalized automotive industry in the U.S. and Canada is expected to drive the global market along with the growing regulatory intervention by the U.S. government regarding the use of conventional lubricants. As a strategic & basic approach to national defense, which is another guiding force for the market, the U.S. Air Force also encourages plant-derived biodegradable products. The rising governmental spending on bio lubricants used in the marine and automotive industries is likely to create lucrative opportunities for the market.

Asia Pacific is home to major automotive production centers other than developed ones such as the U.S. and Germany. China, India, Indonesia, and Thailand manufacture and sell passenger cars and other vehicles to developed regions. The shift of manufacturing facilities to Asian countries is projected to further increase automobile spending and industrialization due to favorable government policies and cheap labor. In addition, a change in the trend toward sustainable, more productive vehicles is expected to fuel this market in the region.

The use of bio-based chemicals in Europe is being encouraged by strict legislation and the ongoing shift toward a bio-economy in Germany, Italy, the Nordic countries, Benelux countries, and France.

The growing awareness of biodegradable lubricants in Latin America is expected to drive the market during the forecast period. Moreover, high growth in major end-use industries, such as automotive, mining, metalworking, and others, is expected to boost the market in the region.

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The fast growth of the market for base oil, combined with rapid industrialization, population growth, and urbanization is expected to boost the Middle East & Africa market growth and witness significant growth rate during the forecast period. Strong demand for high-performance, premium passenger cars has risen from rapid economic growth combined with a rising standard of living. Such trends have largely drawn strong investments from international automotive manufacturers, which is likely to fuel the market.

KEY INDUSTRY PLAYERS

Strategic Planning Adopted by Companies to Strengthen their Market Share

The key market share is intensely competitive, with large oil companies battling with independent, small & medium-sized specialist key players. The market is currently in a nascent growth stage, but with the major share owned by top companies, such as Panolin, Fuchs, Total, Shell, Exxon Mobil Corporation, and bp p.l.c., the market is strongly concentrated.

Global oil refiners, historically engaged in manufacturing conventional lubricants, are rapidly supplying biodegradable lubricants for transport applications. In addition to the above-mentioned companies, most suppliers are small businesses based solely on R&D in bio-based lubricants. Several other companies, such as Cargill, Axel Christiernsson, BECHEM, Cortec Corporation, Environmental Lubricants Manufacturing, Inc., Klüber Lubrication, and Novvi, LLC, are active participants in the market.

LIST OF KEY COMPANIES PROFILED:

• PANOLIN AG (Switzerland)


• FUCHS (Germany)


• Shell (Netherlands)


• Exxon Mobil Corporation (U.S.)


• Total (France)


• Cargill (U.S.)


• Axel Christiernsson (Sweden)


• BECHEM (Germany)


• Cortec Corporation (U.S.)


• Environmental Lubricants Manufacturing, Inc. (U.S.)


• Klüber Lubrication (Germany)


• Novvi, LLC. (U.S.)


• Repsol (Spain)


• bp p.l.c. (U.K.)


• Emery Oleochemicals (Malaysia)


• IGOL (Norway)


• LanoPro (Norway)

KEY INDUSTRY DEVELOPMENTS:

• November 2020 – Chevron and Novvi LLC announced the first fully-renewable base oil production from Novvi’s Deer Park facility in Houston, Texas. The company added main processing measures and debottlenecked processes to make a standalone site for the Deer Park facility and enable 100% clean and sustainable product lines to be produced.


• December 2020 –Axel Christiernsson introduced heavy-duty biodegradable grease. A new biodegradable heavy-duty grease, ALASSCA 762 BD, complies with both the VGP Regulations and the Swedish Standard 155470.0.

REPORT COVERAGE

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The global bio lubricants market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, products, and products. Also, it offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years. It further includes historical data & forecasts revenue growth at global, regional, and country levels and analyzes the industry's latest market dynamics and opportunities.

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